AMD Is the Least Owned Semiconductor in the S&P 500 – But Its AI Ambitions Tell a Different Story

For years Advanced Micro Devices (AMD) has carried the reputation of being the underdog in the semiconductor world, often underestimated by Wall Street despite delivering products that consistently punch above their weight. The latest survey from Bank of America (BofA) underscores just how stark this disconnect has become: AMD is now the least owned semiconductor stock in the entire S&P 500, with only 20% of fund managers reporting an active position as of August 2025. This is a remarkable decline not only from May’s 23% ownership but also from the much healthier 39% recorded a year ago.

Even more telling is the company’s weighting within the S&P 500 itself.

AMD’s relative presence has dwindled to just 0.16x, down 5% quarter-over-quarter and a staggering 80% compared to last year. Yet here’s the paradox: while professional investors have been quietly stepping away, AMD’s stock price has climbed 34% since the start of the year, comfortably beating the Philadelphia Semiconductor Index (PHLX). It’s a case study in how market sentiment doesn’t always line up neatly with performance.

Part of the hesitation may stem from AMD’s bruising second quarter of 2025, when the company reported a GAAP operating loss. This was tied to an $800 million write-down related to U.S. export controls on its Instinct MI308 products, which ballooned its cost of goods sold by 59% year-over-year. On paper, those numbers looked rough. But the context matters: the Trump administration has since relaxed restrictions, meaning AMD can now offload those same MI308 GPUs at almost no cost, generating unusually high gross margins. Analysts at Susquehanna have even projected that this will give AMD a boost in its second half earnings and gross margin profile.

Meanwhile, the growth engine is still very much alive. AMD recently guided for Q3 2025 revenues of $8.7 billion, up more than 14% from the prior quarter’s $7.6 billion. That growth trajectory is reinforced by the company’s launch of its MI350 GPUs, based on the fourth-generation Instinct architecture. These chips, arriving in Q3, are designed for AI acceleration, promising a 4x increase in raw compute power and a staggering 35x improvement in inferencing workloads. For a market where AI demand is exploding, that is not a trivial upgrade.

The bigger picture is that AMD continues to balance the competing pressures of market share and gross margin. While some investors lament that Nvidia dominates laptop discrete GPUs through aggressive OEM bundling tactics, AMD has focused on profitability rather than a race-to-the-bottom in volume. This strategy may frustrate those craving immediate share gains, but it reinforces why the company can surprise with resilience even when fund managers turn cold.

Contrarians will see opportunity here: a company growing revenue at double digits, outpacing its peers in stock performance, rolling out new AI-centric hardware – and yet largely shunned by institutional investors. History shows that such disconnects rarely last forever. Whether the market is underestimating AMD again remains to be seen, but for now, the gap between perception and reality is as wide as it has been in years.